A.M. Best Upgrades Credit Ratings of Some Members of Coverys Companies

June 30, 2017 by matray

On June 29, 2017, A.M. Best announced it has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) of Medical Professional Mutual Insurance Company’s (ProMutual) wholly owned subsidiaries, MHA Insurance Company (MHA), Washington Casualty Insurance Company (Washington Casualty) and Preferred Professional Insurance Company (PPIC). In addition, A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of ProMutual and its other wholly owned subsidiaries, ProSelect Insurance Company, Coverys Specialty Insurance Company, and its sponsored risk retention group, Coverys RRG, Inc. The credit rating outlook for the Coverys Group has been affirmed at stable. According to A.M. Best, the rating upgrades for MHA, Washington Casualty and PPIC are due to their strategic significance and support provided by parent company, ProMutual. The ratings of ProMutual, which are based upon the consolidation of this company with its insurance subsidiaries, are reflective of its strong balance sheet, leading market presence in the U.S. medical professional liability (MPL) insurance sector and effective use of enterprise risk management. “We were happy to learn the ratings for MHA, Washington Casualty and PPIC have been upgraded, and the ratings for ProMutual, ProSelect, Coverys Specialty and Coverys RRG were affirmed,” said Gregg Hanson, CEO and president of Coverys. “Coverys has a strong balance sheet and an investment portfolio that generates consistent investment income, contributing to positive net operating income and surplus growth.”

The GOP Plan to Protect Doctors from Frivolous Lawsuits

March 22, 2017 by matray

If one wanted to divine how the GOP intends to address medical professional liability in its yet-to-be-determined replacement for the Affordable Care Act, one place to look would be the legislation introduced by U.S. Rep. Phil Roe in January. “When I came to D.C., the Republican Study Committee asked me to write a Republican alternative to the Affordable Care Act,” Roe said. “I formed a solid group on my committee, and when putting this together, I thought it wouldn’t be complete without a malpractice piece because the cost of unnecessary defensive medicine practiced in this country is enormous. If you go to an emergency room today and say your belly hurts, you’re going to get a CT scan, an ultrasound and — most likely — a multi-thousand-dollar bill. Did the quality of care go up that much more? My answer to that is, ‘No, it did not.’” Crafted by Roe — a board-certified obstetrician/gynecologist — in conjunction with members of the conservative House Republican Study Committee, the American Health Care Reform Act of 2017 addresses medical professional liability and its correlating practice of defensive medicine by creating a mechanism to remove certain medical liability claims from state court to district court, where defendant physicians would be able to take advantage of a safe harbor from lawsuits when practicing within predetermined clinical practice guidelines. Safe Harbors and the Standard of Care At the heart of any medical liability lawsuit is the standard of care and whether that standard was deviated from. The safe harbor concept is designed to protect physicians from malpractice liability if they provide care that follows predetermined, uniform clinical practice standards. Under the American Health Care Reform Act of 2017, the Secretary of Health & Human Services would enlist professional organizations to create and maintain “clinical practice guidelines, including when applicable, appropriate use criteria, that incorporate best practices.” If an adverse event does occur, and a medical liability claim is asserted, safe harbors operate by establishing a presumption of non-negligence if the named physician adhered to the applicable, approved standards. Health policy experts who support the safe harbor concept argue that it injects predictability and reliability into medical liability litigation, while promoting evidence-based, standardized care and decreasing the utilization of unnecessary tests. The American Health Care Reform Act of 2017 would create a legal “safe harbor” from liability for physicians who follow evidence-based, best practice guidelines by providing: (1) a voluntary right of removal to federal court so long as there is a federal payer (e.g., Medicare, Medicaid) or a federal statute is involved, (2) a mandatory independent medical review panel pre-discovery and (3) an increased burden of proof for plaintiffs to overcome summary judgment from the standard of “preponderance of the evidence” to that of “clear and convincing” after a finding of non-negligence by the review panel. “The reason we need [safe harbor legislation] is because defensive medicine is producing overutilization, driving up costs,” said Rep. Garland “Andy” Barr IV, who was a practicing liability lawyer prior to his election to Congress and is a co-sponsor of the American Health Care Reform Act of 2017. “The litigation lottery environment that I was exposed to in private practice, both on the plaintiff side and representing hospitals and physicians, was evidence enough to know that there’s a lot of wasteful expenditures in the administration of healthcare services that are unnecessary and not medically indicated, simply for purposes of protecting doctors, hospitals and nurses from frivolous lawsuits. “We think that the best way to go about this is to provide a safe harbor for those healthcare providers who adhere to clinical practice and diagnostic guidelines. These are peer-reviewed, evidence-based guidelines. The argument to the plaintiffs’ bar, patient advocates and people who are concerned about actual medical errors, is that this would actually raise and standardize the standard of care nationwide.” While Barr appears to view a nationwide standard of care as a positive, many thought leaders in the medical professional liability realm are against safe harbor legislation for exactly that reason. Traditionally, the standard of care has been defined as the average degree of skill, care and diligence exercised by members of the same profession, practicing in the same or similar locality in light of the present state of medical and surgical science. To move the standard of care from local to nationwide would likely open certain physicians to increased liability claims. For example, physicians in small rural communities do not have the same opportunities as their urban counterparts to learn of the latest medical advances and use the latest medical innovations. An urban medical professional could then provide expert medical testimony that the defendant rural physician should have employed technology and testing not readily available in the defendant physician’s local community. And a savvy plaintiff attorney could argue that any deviation from the clinical practice guidelines is a breach of the standard of care, thus an act of medical negligence. Why No Noneconomic Damage Caps? And Why District Court?  The medical malpractice insurance industry has consistently stated that the most effective means for reducing the cost of medical liability is to impose noneconomic damage caps on jury verdicts. The initial version of Rep. Roe’s legislation, the American Health Care Reform Act of 2013, did include a $250,000 cap on noneconomic damages, but both Roe and Barr admitted that there is no chance such caps would be able pass the House and Senate. “They’re a bridge too far,” Roe said of noneconomic damage caps. “You will never get caps passed. It’s just not possible. If we had put caps in this legislation, it would be dead. We’ve tried it in the past, and it goes nowhere.” Roe is referring to the political reality that Republicans face in repealing and replacing the Affordable Care Act. Democrats in the Senate are likely to filibuster any wholesale attempt at repealing the landmark legislation that brought 22 million Americans healthcare coverage for the first time, leaving Republicans the parliamentary procedure known as reconciliation to repeal and replace the specific parts of the law that deal with matters that relate to budgetary spending. Because medical professional liability reform does not fall under that banner, any changes to the medical tort system will require 60 votes to reach President Donald Trump’s desk for his signature. This will require concessions to both Democrats and the more conservative members of the Republican Party. “There are certain things we can and cannot do in the repeal-and-replace agenda via reconciliation; [medical malpractice] reforms need to move through regular order,” Barr said. “In order for us to have a chance to bring eight Democrats along, we have to be sensitive to some of the objections or concerns that have been raised in the past, and there is pretty uniform opposition to caps on noneconomic damages among Democrats.” The authors of the American Health Care Reform Act of 2017 also had to keep in mind the objections of conservative Republicans who stopped their own party’s Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act from getting out of committee last year on grounds that it violated the Tenth Amendment and the principle of federalism because the federal government has no authority to overwrite state civil liability laws. “We address the federalism concern by recognizing the tort law and medical malpractice litigation is traditionally within the jurisdiction of state courts,” Barr said. “But there is a strong federal interest in preventing overutilization of healthcare, lowering costs for the taxpayers and preventing defensive medicine. Therefore, for any malpractice claim that arises under a federal payer or a federal statute, the defendant should have an elective right of removal to federal court and avail themselves of this safe harbor provision. That’s how we get around the federalism issue. It’s an effort to have an innovative form of medical malpractice reform that can attract bipartisan support in the Senate, and we think it would also have the effect of limiting defensive medicine, even though there are no caps on damages.” This article appeared in the March 2017 issue of Medical Liability Monitor

Does Clinical Integration Reduce Risk, Lower Cost of Care?

September 13, 2016 by matray

One of the priorities driving the Patient Protection & Affordable Care Act of 2010 is the need to rein in the exorbitant costs associated with the world’s most expensive healthcare system. One of the ways in which the reform legislation aims to achieve this goal is by incentivizing disparate physicians, hospitals and other ancillary healthcare entities to work together to provide better medical outcomes at a lower cost by reshaping the reimbursement model away from one rooted in fee-for-service and toward one based on bundled payments for demonstrating value to a population of patients. This requires clinical integration across the continuum of care. Clinical integration refers to the coordination of care across a chain of services, including preventive, outpatient and inpatient acute hospital care as well as post-acute assistance such as skilled nursing, rehabilitation, home health and palliative care, to improve the overall value of the healthcare provided. Proponents say an improved coordination of care can curtail adverse medical outcomes, improve the health of a population, reduce per capita costs and improve the overall patient experience, but this requires relevant ongoing patient data being documented in a longitudinal health record accessible by providers at the point of care. Under the Affordable Care Act, both the federal government and commercial payors have started to move toward value-based reimbursement. Those entities able to demonstrate effective clinical integration are rewarded by the Centers for Medicare & Medicaid Services (CMS) with a share of the cost savings generated by increased efficiency. Evidence of effective clinical integration has also been used as a compelling tool for groups and health systems when negotiating contracts with commercial payors. Critical to realizing reimbursement incentives or negotiating more favorable contracts is the collection of even more data necessary to track quality measures as well as account for and manage shared financial incentives. Not only are CMS and private payors rewarding integration, a number of medical professional liability insurers are offering premium credits for clinically integrated physicians on the assumption that the improved coordination of care will equate to a lower risk profile. To date, there is no empirical data indicating clinical integration alone leads to overall improvement in quality of care or reduced liability risk, and there exists evidence indicating that some of the requirements of clinical integration could actually increase liability risk. Data Collection, Physician Burnout and Dangerous EHR Workarounds To support the new reimbursement models, a clinically integrated healthcare system must manage a vast network of public and private information used by various entities in order to monitor quality and cost. On the clinical end, physicians are responsible for entering patient data into an electronic health record (EHR) repository, making it available to all healthcare providers in the network via a health information exchange that encourages communication along the continuum of care. This exchange of information should eliminate the duplication of services, allow for the automation of trends in vital signs and lab results, and help mine for gaps in care, such as an overdue colonoscopy or mammogram, allowing for a medical team intervention. The upside of collecting more data is evident, but a number of studies have indicated that the increased clerical burden this places upon healthcare providers is contributing to increased physician burnout and the use of dangerous EHR workarounds, such as copy-and-paste practices where previous EHR entries are cloned and inserted into a new progress note as well as disabling or overriding burdensome safety alerts, to save time and increase efficiency. A Mayo Clinic survey of 6,375 physicians, published in May, found that those physicians who employ EHRs and are responsible for computerized physician order entry experienced 33-percent-lower professional satisfaction and a 29-percent-higher risk of burnout. A recent Rand Corp. study of physician satisfaction, conducted on behalf of the American Medical Association, determined the current state of EHR technology and its requisite time-consuming data entry “significantly worsened professional satisfaction in multiple ways.” The correlation between physician burnout and medical error has been well established, and an uptick in liability claims related to EHR issues is beginning to appear in medical malpractice claims data. According to a recent survey of medical professional liability insurers about EHR-related medical liability claims, conducted by the medical malpractice insurance industry trade association PIAA, 53 percent of respondents reported they had seen EHR-related claims. Seventy-one percent of respondents cited copy-and-paste workarounds as the most common source of a claim allegation. While, in theory, the information-sharing benefits of EHR-based clinical integration should improve care continuity and reduce the risk of medical errors, a 2015 study by the National Academy of Social Insurance (“Integrated Delivery Networks: In Search of Benefits and Market Effects”) found “little evidence that integrating hospital and physician care has helped to promote quality or reduce costs.” Other Liability Issues In addition to the risks associated with a heightened clerical burden and physician burnout, clinical integration presents other potential avenues for increased liability.

• Because CMS and private payors are incentivizing cost containment with shared savings and higher reimbursement, physicians participating in a clinically integrated healthcare system open themselves to claims of profit-motivated negligence. In other words, in the event of a negative outcome, a plaintiff attorney could make the charge that when the clinically integrated physician refused to order a test or provide a service, he or she was negligently prioritizing cost savings over patient safety, contributing to the adverse outcome.

• When a patient suffers an adverse medical outcome in a clinically integrated health system, it is reasonable to assume the medical liability claim will use the shotgun technique—where any physician, employer or related entity remotely connected to the adverse event gets named in the claim. This effectively increases the risk profile for each member of a clinically integrated healthcare delivery team. Sorting out who is responsible for the negligence is often a murky endeavor. This will be especially problematic in states that have not reformed joint and several liability.

• Because the Affordable Care Act’s Medicare Shared Savings Program requires clinically integrated systems have in place procedures and processes to promote evidence-based medicine, it could be argued by a plaintiff attorney that clinical integration creates a higher standard of care than exists for non-integrated physicians.

Is Clinical Integration Bending the Cost Curve of American Healthcare? In a June 13 article published by The New York Times (“The Downside of Merging Doctors and Hospitals”), health economist and researcher Austin Frakt questions whether clinical integration lives up to the cost-saving promises made by champions of the Affordable Care Act. Frakt acknowledged that some clinically integrated healthcare delivery systems—for example, Kaiser Permanente, Intermountain Healthcare and the Mayo Clinic, among others—have a reputation for high quality and low cost, but that available evidence suggests clinical integration does not always lead to cost savings and improved care. In his article, Frakt cites the “Integrated Delivery Networks” study, which analyzed data from 15 of the largest hospital-physician integrated delivery networks in the country and discovered that their clinical integration actually raised physician costs, hospital prices and per capita medical care spending when compared to their main competitors. The authors of “Integrated Delivery Systems” found that clinical integration incentives have led to hospital market consolidation, which—in turn—has enabled “dominant actors to demand and receive quasi-monopoly prices for their services from local and national [healthcare] insurers.” A 2016 study by Glenn Melnick, PhD, and Katya Fonkych, PhD, published in The Journal of Health Care Organization, Provision and Financing (“Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems”), supports the allegation that large clinically integrated hospital systems are receiving the quasi-monopoly pricing that the “Integrated Delivery Systems” study found. Melnick and Fonkych looked at data regarding the actual amounts paid by Blue Shield of California, the state’s third-largest healthcare insurer, not billed charges or list prices. When comparing the amount paid by Blue Shield to the state’s two largest clinically integrated healthcare systems (comprising nearly 60 hospitals) to that paid to about 175 other California hospitals, their study concluded the amount paid to the two largest systems jumped 113 percent between 2004 and 2013, while the other hospitals’ reimbursement increased 70 percent. At the beginning of that period, prices were similar at all of the hospitals studied, but by 2013 the average payment per admission was $19,606 for the two largest systems and $15,642 for the rest. According to Melnick and Fonkych, the substantial difference in reimbursement suggests that larger systems are using the size of their clinically integrated system as leverage when negotiating contracts with health plans on an “all-or-none” basis, requiring the plan to include all system member hospitals in the plan’s preferred networks, regardless of their prices or quality relative to other healthcare systems in the market. Conclusion Increased clinical integration of the healthcare system holds potential to improve medical outcomes, reduce redundant testing, decrease medical error and trim the overall cost of care in the United States. As with any systemic change, clinical integration will also present risk challenges as it ingrains itself into the overall American healthcare delivery system. It is important to recognize the magnitude of the changes occurring and anticipate the negative externalities likely to arise. When medical liability insurers contemplate offering discounts to physicians for participating in a clinical integration program, they should consider if the discount is warranted based on the actual underlying risk. Insurers could be open to questions of whether this pricing is biased against (and at the same time alienates) their physician insureds with a comparable-or-lower risk profile but who pay a higher premium because they do not participate in a clinical integration program that carries a discount.

Sign-up Now for ACI’s 2nd National Advanced Forum on Medical Liability

August 10, 2016 by matray

American Conference Institute’s 2nd National Advanced Forum on Medical Liability – Claims, Coverage and Risk Management on October 27-28, 2016 in New York City. This conference will bring together an impressive faculty of government officials, medical experts, risk managers, insurance professionals and leading plaintiffs’ and defense attorneys, who will provide the most up-to-date information on complex medical issues and litigation hurdles. The attendee list already reads like a who's who of the industry. Make sure that you're not left off of the list! ► View the company presence so far ◄ WHY ALL THE BUZZ?

• Lawyers, both plaintiff and defense, who litigate cases are attending to get a solid grounding on the latest medical issues upon which cases are based. Our faculty of medical and legal experts from around the nation will provide them with the information and strategies that are essential to achieve the best outcomes for their clients
• Insurance professionals are attending in order to obtain valuable insights and strategies for assessing professional negligence claims and to better understand litigation strategies and hospital risk management techniques
• Doctors, nurses and hospital risk/quality assurance managers are attending to benchmark their current practices and procedures and develop a deeper understanding of the current state of coverage and litigation

Sessions include:

• ELECTRONIC MEDICAL RECORDS, METADATA, AUDIT TRAILS
• The Latest CYBER THREATS to the Healthcare Industry: PHI Data Breaches, the Recent Alarming Wave of “RANSOMWARE ATTACKS,” Growing Cybersecurity Threats to Medical Devices
• Mitigating Exposure to Rising Healthcare BATCH CLAIMS, and Defending Against Batch Claims Once They Are Brought
• CALCULATING DAMAGES in Med Mal Cases, Catastrophic Injury & Life Planning Considerations and USING THE ACA TO MITIGATE FUTURE DAMAGES
• HOSPITAL BORNE ILLNESSES & INFECTIOUS DISEASES: What Hospitals Can Do to Mitigate Risks and Avoid Legal Implications
• HOSPITAL WORKER MISCLASSIFICATION ISSUES AND OSTENSIBLE AGENCY in Medical Malpractice – What Are the Risks?
• Does Saying Sorry Work?: An Industry Discussion of DISCLOSURE AND APOLOGY LAWS and Their Impact on Medical Malpractice
• TELEMEDICINE, 3D PRINTING, ROBOTIC SURGERY & OTHER MEDICAL DEVICE DEVELOPMENTS – Mitigating Emerging Exposures & Assess These Technologies from an Enterprise Risk Management Perspective
• New Claims Trends Related to the U.S. Pain Crisis: Taking a Look at the Recent PRESCRIPTION OPIOID ABUSE EPIDEMIC and Its Impact on a New Wave of Med Mal Insurance Claims
• And so much more

► View full agenda here ◄ For more details, visit us online at www.AmericanConference.com/MedLiability Or register now by calling: 1-888-224-2480 Be sure to also book for the Brain Injury Master Class: Oct. 28; 2-5 p.m.

Berkshire Hathaway to Purchase MLMIC

July 18, 2016 by matray

Medical Liability Mutual Insurance Company (“MLMIC”), the largest underwriter of medical professional liability insurance in New York, announced today that it has entered into a definitive agreement, pending regulatory and policyholder approval, to be acquired by National Indemnity Company, following the completion of the conversion of MLMIC to a stock company from a mutual company. National Indemnity Company is a subsidiary of Berkshire Hathaway Inc., one of the world’s leading insurance organizations. The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions and regulatory approvals. “Good things are worth waiting for,” said Berkshire Hathaway CEO Warren Buffett. Mr. Buffett further stated, “MLMIC is a gem of a company that has protected New York’s physicians, mid-level providers, hospitals and dentists like no other for over 40 years. We welcome the chance to add them to the Berkshire Hathaway family and enhance their capacity to serve these and other policyholders for many years to come.” “We are delighted to partner with such a fine organization. MLMIC has always had strong standing and stability within the challenging New York insurance market, and the arrangement with Berkshire Hathaway will bring policyholders further peace of mind, knowing MLMIC will be able to offer an even higher level of financial security. In addition, MLMIC will be able to expand its offerings, with more customized policy limits, risk‐sharing features and services to groups, facilities and other large accounts,” said MLMIC President Robert Menotti, MD. In a letter to policyholders, Menotti said, “Berkshire Hathaway values our operations, board, staff and endorsed partners. Most importantly, Berkshire Hathaway is committed to MLMIC’s future success and its ongoing dedication to serving policyholders.” Keefe, Bruyette & Woods, a Stifel Company, served as financial advisor and Willkie Farr & Gallagher LLP served as legal counsel to MLMIC in this transaction. Additional information can be found at www.mlmic.com/faq.

ACI’s 2nd Advanced Forum on Medical Liability Claims, Coverage & Risk Management, Oct. 27-28, NYC

July 7, 2016 by matray

Healthcare providers face rising medical professional liability exposures given the recent increase in healthcare-system utilization under the Affordable Care Act (Obamacare), shifting trends in hiring and employment patterns as well as healthcare delivery models, increased use of electronic platforms and portals, decreasing reimbursements and greater regulatory scrutiny. As such, all those along the medical liability continuum are looking for answers on assessing and mitigating risk, managing litigation, defending claims and altering underwriting processes to address the changing medical liability landscape. That is why you cannot afford to miss American Conference Institute's 2nd National Advanced Forum on Medical Liability - Claims, Coverage and Risk Management on October 27-28, 2016 in New York City. This conference will bring together an impressive faculty of government officials, medical experts, risk managers, insurance professionals and leading plaintiffs' and defense attorneys, who will provide the most up-to-date information on complex medical issues and litigation hurdles, including: • ELECTRONIC MEDICAL RECORDS, METADATA, AUDIT TRAILS: Tackling the Unique Malpractice Risks and E-Discovery Challenges • The Latest CYBER THREATS to the Healthcare Industry: PHI Data Breaches, the Recent Alarming Wave of "RANSOMWARE ATTACKS," Growing Cybersecurity Threats to Medical Devices and Beyond • Mitigating Exposure to Rising Healthcare BATCH CLAIMS, and Defending Against Batch Claims Once They Are Brought • CALCULATING DAMAGES in Med Mal Cases, Catastrophic Injury & Life Planning Considerations and USING THE ACA TO MITIGATE FUTURE DAMAGES • HOSPITAL BORNE ILLNESSES & INFECTIOUS DISEASES: What Hospitals Can Do to Mitigate Risks and Avoid Legal Implications • HOSPITAL WORKER MISCLASSIFICATION ISSUES AND OSTENSIBLE AGENCY in Medical Malpractice - What Are the Risks? • Does Saying Sorry Work?: An Industry Discussion of DISCLOSURE AND APOLOGY LAWS and Their Impact on Medical Malpractice • TELEMEDICINE, 3D PRINTING, ROBOTIC SURGERY & OTHER MEDICAL DEVICE DEVELOPMENTS - Mitigating Emerging Exposures & Assess These Technologies from an Enterprise Risk Management Perspective • OBSTETRICS: Looking at 2016's Biggest Claims Trends, New & Emerging Risks and What to Expect in the Year Ahead • New Claims Trends Related to the U.S. Pain Crisis: Taking a Look at the Recent PRESCRIPTION OPIOID ABUSE EPIDEMIC and Its Impact on a New Wave of Med Mal Insurance Claims • A to Z of LITIGATING YOUR MEDICAL MALPRACTICE CASE: An Examination of Each Stage Including Trial Techniques, Lining Up the Right Experts, Using Technology in Trial Presentations, and Beyond Register now by calling: 1-888-224-2480 Or by faxing your registration form to: 1-877-927-1563. You can also register online at www.AmericanConference.com/MedLiability Be sure to also book for the Brain Injury Master Class: Oct. 28; 2-5 p.m.  

Supreme Court Upholds Affordable Care Act Subsidies: What it Means for the Medical Professional Liability Industry

July 2, 2015 by matray

On June 25, the U.S. Supreme Court endorsed consumer subsidies to purchase healthcare insurance in the 36 states that have not established their own exchange under the Patient Protection & Affordable Care Act. The decisive 6 - 3 decision in King v. Burwell further cemented the reforms from President Barack Obama’s signature legislation into the American healthcare delivery system. “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them,” wrote Chief Justice John Roberts, explaining the Court’s rationale in the majority opinion. “If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.” With King v. Burwell decided, and the Affordable Care Act the law of the land, the question that remains to be answered is how the healthcare law will affect the medical professional liability industry. Since its passage in 2010, many medical malpractice professionals have worried that the influx of 10 to 30 million newly insured individuals carries the potential to create a spike in claims frequency. The reasoning is that individuals who have health insurance are more likely to engage the healthcare system, which creates more opportunity for unintended medical outcomes. Alarmists also point to coordinated care as a depersonalization of medicine because patients will no longer just see one doctor for their healthcare needs, and studies show that patients are less likely to sue a physician they have a personal relationship with. A contrary theory is that greater access to healthcare will equate to better preventive care, which will lead to fewer bad medical outcomes, which will lead to fewer claims of medical malpractice. An emerging legal theory expected to be tested is whether the Affordable Care Act could have a deflating effect on medical liability indemnity payments in those states that limit awards based on reimbursement from collateral sources—e.g., healthcare insurance. In a Rand Corp. white paper titled How Will the Patient Protection & Affordable Care Act Affect Liability Insurance Costs?, David Auerbach, Paul Heaton and Ian Brantley argue that the court systems that limit the collateral source rule could actually see a reduction in medical liability damage awards. Payments to victims of medical malpractice could be reduced once the injured party obtains coverage under the Affordable Care Act and payments for care made on their behalf by health insurers deducted from their award. “What we’re going to be litigating in the near future is whether covering the out-of-pocket expenses related to buying healthcare insurance can substitute for the high-dollar cost of care. That’s an interesting issue that’s going to play out throughout all the states,” said Craig Brodsky,  Esq., a partner in the law firm Goodell Devries, who specializes in professional liability defense. “The defense will argue that the plaintiff’s future medical costs should be measured by the out of pocket expenses for a health insurance policy and co-pays that will provide care at no cost for the rest of the plaintiff’s life. That’s a lot less than paying for the actual care. The question is whether states will allow healthcare providers to make this argument.” The Supreme Court decision in King v. Burwell turns the page on what might be the last significant legal challenge to the Patient Protection & Affordable Care Act of 2010. What remains to be seen is exactly how it will affect medical professional liability claims frequency and severity. This article appears in the July 2015 issue of Medical Liability Monitor.

2015 PLUS Medical PL Symposium Focused on Innovation, Liability Implications

May 19, 2015 by matray

The following is an unabridged version of Medical Liability Monitor's review of the 2015 PLUS Medical PL Symposium. An abridged version of this article appears in the May issue of Medical Liability Monitor. With the U.S. healthcare delivery system negotiating its way through unprecedented reforms, the Professional Liability Underwriting Society (PLUS) focused its 2015 Medical PL Symposium on innovation and its implications for medical liability. This year’s symposium took place April 28-29 at the Marriott Marquis in downtown Atlanta. The two-day event’s focus was highlighted by the keynote address given by “innovation activist” John Kao. A graduate of Yale College, Yale Medical School and Harvard Business School as well as a celebrated author, Tony-nominated producer/musician who apprenticed under composer/arranger/guitarist/bandleader/iconoclast Frank Zappa, serial entrepreneur and consultant, Kao’s keynote shared his provoking perspectives on the “how” of innovation—where it is defined not only as a brainstorm-to-blueprint, but by results based on discipline and practice. In keeping with the keynote’s theme, the PLUS Medical PL Symposium content drilled down on the many innovations being implemented in today’s healthcare environment and the resulting liability issues. The opening session, What Is the Impact of PPACA on MedPL Exposures, compared the most up-to-date available data with some of the past predictions made about how the Patient Protection & Affordable Care Act (PPACA) of 2010 was going to impact medical professional liability. While the session’s panelists agreed that the pace of change has been, at times, overwhelming, the prediction that an influx of newly insured patients would overwhelm the healthcare system and expand claims frequency has not proven true. Panelist Michael Reynolds, claims director and director of government relations for ProAssurance, pointed to how a state-level trend toward giving advanced mid-level clinicians (such as nurse practitioners and physician assistants) full-practice authority and the rise of retail medical clinics have blunted the impact of the nation’s physician shortage. During the session Technology in Healthcare: EHRs & PHI, panelists addressed the myriad of technological advances in healthcare as well as heightened exposures due to the increased collection of personal health information (PHI) and their impact on risk management and underwriting approaches being utilized. Panelist Brenda Osborne, executive vice president of the Healthcare Division at Lexington Insurance, referenced data from CRICO, the Harvard-affiliated risk management group, that indicated the greatest challenges in implementing and executing electronic health record (EHRs) in a hospital setting is the inability of different EHR models to communicate cross-platform, system errors that cause the EHR to crash and the inherent dangers when humans are tasked with entering data into EHRs. Fellow panelist Joshua Rozovsky, a technology consultant, emphasized that a data breach can be expensive, but the real danger is in an unknown hacking the system and altering patient records or shutting down the entire system for ransom. The session Batch Claims: What Are the “Three P’s”? addressed the potential for batch/multi-claimant situations in the context of medical professional liability claims. These claims are high-profile, big-dollar claims, such as the $190 million Johns Hopkins Health System had to pay for its OB/Gyn who secretly recorded pelvic exams of his patients, the cardiologist indicted for performing dozens of unnecessary heart stent placements or the Las Vegas physician who exposed hundreds of patients to Hepatitis C by reusing endoscopy equipment. Panelist Scott Crockett, an attorney, noted that batch claims became more prominent in medical liability five years ago, and that in the last 24 months, he had seen two medical malpractice batch claims that totaled more than $290 million. Now, he said, batch coverage is common in hospital professional liability policies, and when a plaintiff attorney gets a case, he or she almost always goes on a phishing expedition for similar cases in hopes of creating a batch claim. Fellow panelist Brad Ash, senior vice president of Insurance Services at The Doctors Company, stressed that there are really “no pricing guidelines for batch coverage” and “batch claims are unpredictable and often catastrophic.” The session titled The Changing and Expanding Role of Emergency Medicine dealt with the growing demands on the nation’s emergency departments as they have become gatekeepers on readmissions in a healthcare reimbursement model that punishes readmissions. According to panelist Tom Syzek, vice president of Online Learning at The Sullivan Group, there is both spoken and unspoken pressure coming from hospital administrations not to readmit patients. The moderator, Robert Blasio of Western Litigation Inc., noted an expected physician deficit of 95,000 emergency physicians within the next five years, which requires the increased use of advanced practice clinicians and no one is certain of the medical liability implications of having these mid-levels take a greater role in the emergency department. The session Coming to You: Medical Marijuana MedPL Exposures explored how malpractice carriers underwrite this relatively new exposure. While the exposure is greater for general liability, the panelists emphasized how extremely specific the policy language is for insurers who cover the medical liability side. Panelist Deb Goldberg, managing director at Markel Corp., noted that while the policy language can be very explicit, the insureds have a “strong interest in meeting all the requirements of the policy and state law.” The second day of the symposium began with Healthcare Access in Your Big Box Store. This very new phenomena has been wildly popular with consumers because its one-stop shopping makes services accessible for the time challenged, while the low-cost of primary care in retail medical clinics for those seeking value. With almost 2,000 retail clinics currently operating in stores like Wal-Mart, Target and Walgreens, and another 1,000 expected to open in the next year, panelist Alice Epstein, allied healthcare facilities risk control liaison for CNA Financial, said that this model is perfect for younger consumers who “value immediate attention over a physician/patient relationship.” Panelist Kevin O’Brien, senior vice president at Arch Insurance Group, added that while convenience care is not yet regulated, these clinics practice protocol-based medicine, and if they follow their protocols, there is low-risk involved. Ending the two-days of educational sessions was Mo’ Money, Mo’ Problems: Do Limits Increase Claims Values where panelists tackled the question of whether being overinsured invites higher-value losses or being underinsured can actually lower ones exposure. Panelist Michael Barrett, a plaintiff attorney, acknowledged that the amount of insurance is first and foremost in a lawyer’s mind when considering a case. Panelist Paul Marshall, senior vice president of the Healthcare Liability Practice Group at the Marsh & McLennan Agency, argued that being underinsured could generate anger in a jury and invite bad faith punitive damages, while William McDonough, managing principal at Integro Insurance Brokers, said that he has never subscribed to the idea that you can be overinsured because he believes “a claim is worth what a claim is worth.”

Medical Liability Monitor Publishes 2014 Annual Survey of Medical Malpractice Rates

October 10, 2014 by matray

Medical Liability Monitor’s 2014 Annual Rate Survey Indicates the Medical Professional Liability Insurance Industry’s Decade-Long Premium Decline Continues with No Indication of a Course Correction in Sight

PIAA Members Convene in Toronto For Medical Liability Conference Focused on Navigating Uncertain Times in Healthcare Delivery

June 4, 2014 by matray

With the healthcare delivery system navigating a sea of reform, PIAA members convened from May 14 - 16 to share ideas for success and gain insight from experts at the medical professional liability insurance trade association’s annual Medical Liability Conference. This year’s confabulation took place at Toronto’s Fairmont Royal York Hotel and tackled topics such as enterprise risk management, electronic health records, hospital employment of physicians, new systemic risks, alternative business models and more. Following is a review of the educational sessions and panel discussions that took place: After welcoming remarks and industry awards, the Medical Liability Conference kicked off with a special keynote session by Reed Tuckson, MD, titled Sustaining Cost-Effective, Patient-Centered Care in an Era of Transformation. As a former vice president for professional standards at the American Medical Association, a previous commissioner of public health for the District of Columbia and former president of the Charles R. Drew University of Medicine & Science, he was uniquely qualified to offer fresh perspectives on recent developments in U.S. healthcare as well as insights into the successes and challenges experienced as the Affordable Care Act continues to roll out. Prowling the crowd with his wireless microphone, Dr. Tuckson shared volumes of data on what healthcare reform might really mean to medical professionals, their patients and the medical liability insurance industry. He shared his belief that PIAA companies have an important role to play in the future of healthcare delivery and praised the association’s Data Sharing Project as a potentially invaluable resource moving forward. In conclusion, Dr. Tuckson encouraged PIAA members to be “more public with your contributions to the industry.” With the Affordable Care Act ushering physicians into a healthcare delivery model that emphasizes accountable care organizations and coordinated care, Gregg Hansen, chief executive and president of Coverys, moderated a widely attended panel discussion on Hospital Employment: The Physicians Changing Role, during which Hayes Whiteside, MD, chief medical officer and senior vice president of risk management at ProAssurance Corp., compared the exodus of physicians from private practice to hospital employment to a sort of schizophrenia, “where everything about the trend of hospitals employing physicians is consistently inconsistent.” While noting a statistically significant increase in the number of physicians employed by hospitals, Dr. Whiteside pointed to a number of factors that signal the era of private practice is far from dead. Graham Billingham, MD, chief medical officer at Princeton Insurance Co., and Luke Sato, MD, senior vice president and chief medical officer at CRICO, focused their attention on the opportunities for PIAA companies in an era of physician hospital employment. Specifically, hospitals are not educated in physician exposures and physician risk management in the same way the medical professional liability insurance industry is. This spells opportunity for PIAA companies. Joan Winters Burmaster, RN, JD, general counsel at LAMMICO, moderated a panel discussion about Attacks on Civil Justice Reform. With an initiative that would retroactively index the MICRA cap on noneconomic damages to inflation qualifying for this November’s ballot in California making headlines, panelists examined the latest information on what is being done to defend important reforms, including what has and has not been successful so far and why. With physicians and attorneys often holding divergent opinions on the merits and risks involved in using clinical decision support tools, the session titled Information Technology-Based Decision Support: the Good, the Bad & the Unknown provided a valuable update on the rapidly advancing science of health information-based decision support. Moderated by Jaan Sidorov, MD, chairman of the board of directors at NORCAL Mutual Insurance Co., panelists Domenic Crolla, Esq., partner at Gowling Lafleur Henderson LLP, and Martin Kohn, MD, chief medical scientist at Jointly Health, examined a range of potential liability risks associated with the use of this emerging technology in both diagnosis and treatment. Of particular concern to both panelists was how constantly evolving technologies affect standard of care issues. In a session titled From Obstacles to Opportunities: Using ERM as a Platform for Business Success, Catherine Walberg, JD, senior vice president of legal and government relations at Physicians Insurance A Mutual Co., moderated a discussion on how medical professional liability insurance companies can employ enterprise risk management (ERM) metrics to identify and evaluate new business opportunities. Panelists Gerry Glombicki, CPA, director at Fitch Ratings, David Ingram, executive vice president at Willis Re, and Mark Stephens, managing director of corporate risk advisory services for Milliman Inc., discussed how a disciplined approach to risk management and strategic planning may prove helpful to medical liability insurers in preserving capital and reducing market volatility. Stephen Underdal, JD, managing director and head of global healthcare for Guy Carpenter, moderated a session on Alternative Business Models for MPL Insurers. With an increasing number of physicians choosing hospital employment over private practice, smart medical professional liability insurance companies are founding risk retention groups, creating captives, entering into contractual partnerships with hospital systems or unbundling their services to sell them as individual products. Panelists Susan Forray, principal and consulting actuary at Milliman Inc., Michael Maglaras, principal at Michael Maglaras & Co, and Neil E.S. Morrell, president of MagMutual Insurance Co., discussed how this trend has been impacting the traditional medical professional liability insurer as well as the pros and cons of each alternative business model. In the session New Systemic Risks in Medical Indemnity: Prediction, Mitigation & Management, moderator Gerry Lewis-Jenkins, executive vice president at COPIC, as well as panelists Paul McKeon, senior vice president and chief underwriting officer at Transatlantic Reinsurance North America, and Thom Petty, senior medical claims handler and clinical risk manager for MDU Services Ltd., walked attendees through the extent of risk inherent in serial claims, class-action litigation and systemic risk. After breakfast and the Annual Meeting of Members hosted on the second day of the PIAA Medical Liability Conference, educational sessions resumed with the universally attended MPL Financial Update: What Exactly Is the “New Normal?” Presented by James Hurley, consulting actuary at Towers Watson, attendees were treated to a detailed look at the critical elements and trends observed in a composite of PIAA companies’ loss experience, premium, balance sheets and income statements during the past 10 years. While aggregate financial results have been favorable for the last several years, Hurley drew attention to a combined ratio that has been creeping upward since 2010, declining investment income as a percentage of premiums, loss reserves that have been deteriorating since 2007 and a small, but steady, increase in the underwriting expense ratio during the last decade. The PIAA Medical Liability Conference closed out with a presentation by Daniel Friedland, MD, president and CEO of SuperSmartHealth, titled A Framework for Cultivating Resiliency in Healthcare, in which he introduced attendees to tools for enhancing healthcare professional wellbeing, patient satisfaction and mitigate malpractice risk. * this article appears in the June 2014 issue of Medical Liability Monitor.